Public services a bargain for Canadians: Study

April 15, 2009

TORONTO – The majority of Canadian households enjoy a higher quality of life because the public services their taxes fund come at a solid bargain, according to a new study by the Canadian Centre for Policy Alternatives (CCPA).

Canada’s Quiet Bargain: The Benefits of Public Spending responds to incessant calls for tax cuts and concludes public services make a significant contribution to the majority of Canadians’ standard of living – worth at least 50% of their income.

“What passes for a tax cut debate in Canada is really only half a debate,” says economist Hugh Mackenzie, the study’s co-author and CCPA research associate.

“Our taxes pay for services that are extremely valuable to Canadians. The suggestion we often hear, that taxes are a burden, hides the reality that our taxes fund public services that make Canada’s standard of living among the very best.”

The study shows middle-income Canadian families enjoy public services worth about $41,000 – or 63% of their income. Even households earning $80,000-$90,000 a year enjoy public services benefits equivalent to about half of their income.

The study also shows 80% of Canadians would be better off if the federal government hadn’t cut the GST; 75% would be better off if their provincial governments invested in public services instead of broad-based income tax cuts; and 88% would be better off without federal cuts to capital gains taxes.

“Tax cuts are always made to sound like they’re free money to middle-income Canadians – they are anything but,” says Mackenzie. “We’re far better off with the public services our taxes fund than we are with tax cuts.”